23
August 2022
PDF version [378 KB]
Dr Hazel Ferguson
Social Policy Section
Key points
- The Bills propose to abolish the role of the National Skills Commissioner, and replace the office of the National Skills Commission with a new body, Jobs and Skills Australia (JSA), headed by the JSA Director.
-
The Jobs and Skills Australia Bill 2022 sets out JSA’s functions, consultation requirements, and staffing arrangements in general terms.
-
The Government intends to introduce further legislation dealing with JSA’s scope, structure, and governance, informed by consultation on these matters, following the Jobs and Skills Summit, which is scheduled for September 2022.
|
Contents
Purpose of the Bills
Background
Committee consideration
Policy position of non-government
parties/independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human
Rights
Key issues and provisions
Concluding comments
Date introduced: 27
July 2022
House: House of
Representatives
Portfolio: Employment
and Workplace Relations
Commencement: The Acts created by the passage of these
Bills will commence on the 8th day after Royal Assent. The Jobs and
Skills Australia (National Skills Commissioner Repeal) Act 2022 will not
commence if the Jobs and Skills Australia Act 2022 does not.
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the home
pages for the Jobs
and Skills Australia Bill 2022 and Jobs
and Skills Australia (National Skills Commissioner Repeal) Bill 2022, or
through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent,
they become Acts, which can be found at the Federal Register of Legislation
website.
All hyperlinks in this Bills Digest are correct as
at August 2022.
Purpose of the Bills
The Jobs
and Skills Australia Bill 2022 (JSA Bill) and Jobs
and Skills Australia (National Skills Commissioner Repeal) Bill 2022 (NSC
Repeal Bill) together propose to abolish the role of the National
Skills Commissioner, and replace the office of the National Skills Commission
(NSC) with a new body, Jobs and Skills Australia (JSA). The creation of JSA was
one of the Government’s 2022 election commitments, having been originally
announced in October 2019.[1]
The JSA Bill sets out the functions and staffing
arrangements for JSA. The Government expects to introduce further legislation
following consultation on JSA’s scope, structure, and governance, informed by
the outcomes of the Jobs and Skills Summit, which is scheduled for September
2022.[2]
The NSC Repeal Bill provides for the immediate repeal of
the National
Skills Commissioner Act 2020 (NSC Act), under which the
NSC operates, if the Jobs and Skills Australia Act comes into force.
Background
Australia’s skill needs
Recruitment difficulties have recently gained considerable
attention as employers in countries around the world report challenges in the
wake of the global COVID-19 pandemic. According to a recent Organisation for
Economic Cooperation and Development (OECD) working paper, Australia is
experiencing some of the highest rates of labour shortages in the OECD.[3]
Australia’s experience reflects a combination of two
distinct factors:
- short-term
labour shortages, generally at lower skill levels, shaped by COVID-19
disruption, resulting in an inability to attract workers under prevailing pay
and conditions
- persistent
shortages of adequately qualified and skilled workers at higher skill levels,
including in technical and trade-based occupations (that is, jobs requiring a
Certificate III, Diploma, Advanced Diploma, Associate Degree, or Bachelor
Degree, or equivalent experience).[4]
The NSC has found 19% of all assessed occupations, and 42%
of Technician and Trade Occupations, are currently in national shortage.[5]
Employment projections suggest that job growth in high
skill level and service-oriented occupations will continue to drive future
demand to 2026, with almost two-thirds of projected employment growth
concentrated in:
- health
care and social assistance
- professional,
scientific and technical services
- education
and training
- accommodation
and food services.[6]
Skill needs within occupations are also transforming, with
skills related to caring, digital skills, non-routine cognitive skills, and
communication and collaboration, increasingly required across a range of
occupations.[7]
The shift in digital skill requirements has been particularly pronounced in
light of the COVID-19 driven acceleration of the digital transformation, with
countries facing common challenges in the area of digital skills acquisition
among workers and firms.[8]
The importance of education and training in meeting these
needs has been reaffirmed during COVID-19, as the acceleration of existing
trends towards higher-skill employment has combined with decreased access to
skilled migration due to border closures.[9]
As borders open, Australia continues to face challenges associated with
international competition for skilled workers.[10]
A range of initiatives have been introduced in both higher education and
vocational education and training (VET) with the aim of better matching skill
demand with the skills offered by workers.[11]
However, efforts to enact wider-scale skills training reforms have largely
stalled.
The National Skills Commission
Successive Australian Governments have sought to
coordinate domestic responses to skill needs through statutory skills related
bodies.[12]
The NSC was announced in the 2019–20 Budget as part of the ‘Delivering Skills
for Today and Tomorrow’ suite of measures that formed the response to the Strengthening
Skills: Expert Review of Australia's Vocational Education and Training System
(the Joyce Review), which had been commissioned in the lead-up to the 2019
election.[13]
The NSC commenced operating in an interim capacity in July
2020 and was formally established under the NSC Act from September 2020.
It is currently responsible for providing advice and information about
Australia’s labour market; current, emerging and future workforce skills needs;
the performance of the VET system; VET pricing; and return on investment in
VET.[14]
It is likely too early to judge the NSC’s impact in terms
of responding to Australia’s skill needs. In 2020 and 2021, it focused on
establishment and an initial body of work including:
Skills training reform during the 46th Parliament
Responsibility for VET is shared between the Australian
Government and the states and territories. Each state and territory administers
VET delivery within its jurisdiction, while the Australian Government supports
these efforts via funding delivered under intergovernmental agreements,
and supports VET students and apprentice employers directly via VET
Student Loans, Trade
Support Loans, and apprenticeship
incentives. Significant influence is also exercised by agreement through
the national VET regulator, the Australian
Skills Quality Authority.
The major intergovernmental agreement for VET is the National
Agreement for Skills and Workforce Development (NASWD). The NASWD sets out
jurisdictions’ shared responsibilities and is the basis for approximately $1.6
billion of ongoing National Specific Purpose Payments from the Australian
Government to states and territories each year.[15]
In 2020, the Productivity Commission released
a review of the NASWD, concluding it is ‘overdue for replacement’, and
recommending a new agreement implement a range of changes including (but not
limited to):
- improving
returns on investment by using NSC work on efficient costs as the basis for
common course subsidies
- setting
minimum fees for Certificate III
- applying
more contestability to public funding of TAFE.[16]
A Heads
of Agreement for Skills Reform was subsequently finalised with the states
and territories in July 2020.[17]
However, jurisdictions did not reach agreement over the expected replacement
for the NASWD during the 46th Parliament. This was reportedly related to
elements of the draft agreement, including possible reductions in funding for
TAFE, and the proposed role of the NSC in setting prices and subsidies (work
that is currently undertaken by the states and territories based on each
jurisdiction’s skill needs, with a different system operating in each
jurisdiction).[18]
The 2022–23 Budget allocated an additional $3.7 billion over 5 years from
2022–23 to work with states and territories on this issue, flagging skills
reform as a significant issue to be addressed during the 47th Parliament.[19]
Committee consideration
Senate Education and Employment Legislation Committee
On 28 July 2022 the Senate referred the Bills to the
Education and Employment Legislation Committee for inquiry and report by 23
September 2022.[20]
Further information is available at the homepage
to the inquiry.[21]
Senate Standing Committee for the Scrutiny of Bills
At the time of writing, the Senate Standing Committee for
the Scrutiny of Bills had not considered the Bills.[22]
Policy position of non-government parties/independents
At the time of writing, no comments on the Bills from
non-government parties/independents were located. However, when JSA was
originally announced by Labor in 2019, the Coalition characterised the idea as
a ‘renaming’ of the NSC.[23]
Position of major interest groups
The Bills are supported by a range of education and
training, union, and employer stakeholders, as discussed in the key issues and
provisions section of this Bills Digest.
Financial implications
The Explanatory Memorandum to the
Bills states that they will have no financial impact, as the creation of JSA
will be funded from savings from abolishing the NSC.[24]
Statement of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Bills’ compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Bills are compatible.[25]
Parliamentary Joint Committee on Human Rights
At the time of writing, the Parliamentary Joint Committee
on Human Rights had not considered the Bills.[26]
Key issues and provisions
JSA establishment and functions
As summarised in Table 1 below, JSA’s proposed remit as
set out in clause 9 of the JSA Bill is
substantially similar to the NSC’s under section 7 of the NSC Act, with
a focus on workforce skill needs and VET common to both. However:
- while
the NSC’s current advisory functions include VET pricing and returns on
investment, JSA will provide advice on a smaller number of less narrowly
defined topics, and consider the ‘resourcing and funding requirements’ for
accessible quality VET delivery as part of a new research function—this appears
to signal a step back from the idea of national VET price setting
- while
the NSC’s current advisory responsibilities are substantially VET-specific,
JSA’s advisory functions have been drafted in broader terms, which would appear
to allow the new body greater scope to consider skill needs in industries and
occupations not served by the VET sector (for example, occupations requiring a
higher education).
Additionally, the consultation requirements to be imposed
on JSA under clause 10 of the JSA Bill are not paralleled anywhere in
the current NSC Act.
It appears JSA’s proposed areas of inquiry are supported
by stakeholders, with the Group of Eight universities and Australian Chamber of
Commerce and Industry welcoming the inclusion of capacity studies and workforce
forecasting in JSA’s functions.[27]
A number of key stakeholders, including Universities
Australia, the Independent Tertiary Education Council Australia, the Australian
Education Union, and the Business Council of Australia, have also welcomed the JSA
Bill’s emphasis on working with and drawing on the expertise of education and
training providers, state and territory governments, unions, and industry.[28]
However, while welcoming the Bills, others have pointed to
the lack of detail in the current drafting. Most notably, the Bills include only
limited provision for JSA’s independence, and do not specify the circumstances
when consultation would be required, or how it would be undertaken. Ai Group
has suggested that ‘[i]t is important that Jobs and Skills Australia be an
independent agency with a strong industry board’, while TAFE Directors
Australia has pointed to the need for JSA’s approach to allow for local
leadership in response to skill needs.[29]
The Government anticipates introducing further legislation fleshing out these
governance issues following consultation.[30]
Table 1 Current
NSC functions and proposed JSA functions and consultation requirements
| Function |
NSC |
JSA |
| Provide advice to the
Minister or to the Secretary in relation to:
|
Australia’s current,
emerging and future workforce skills needs. |
Australia’s current and
emerging labour market, including advice on workforce needs and priorities. |
| The development of efficient prices for VET courses. |
Australia’s current, emerging
and future skills and training needs and priorities (including in relation to
apprenticeships). |
| The public and private return on government investment in
VET qualifications. |
The adequacy of the
Australian system for providing VET, including training outcomes.
|
| The performance of Australia’s system for providing VET. |
| Issues affecting the state of the Australian and
international labour markets. |
| Opportunities
to improve access, skills development and choice for regional, rural and
remote Australia in relation to VET. |
| Undertake research and analysis |
Nil. |
Prepare capacity studies, including for emerging and
growing industries and occupations. |
| Undertake workforce forecasting, assess workforce skills
requirements and undertake cross‑industry workforce analysis. |
| Undertake research and analysis on the resourcing and
funding requirements for registered training organisations (within the
meaning of the National
Vocational Education and Training Regulator Act 2011) to deliver
accessible quality VET courses. |
| Inform the public |
All matters mentioned within the NSC’s advisory functions. |
All matters mentioned within JSA’s advisory and research
functions. |
| Collect, analyse, share and publish data and other
information |
All matters mentioned within the NSC’s advisory functions. |
All matters mentioned within JSA’s advisory and research
functions. |
| Other functions |
As conferred on the Commissioner by the rules, by the NSC
Act or by any other law of the Commonwealth, or is incidental or
conducive to the performance of the above functions. |
As conferred on JSA by the rules (made by the Minister
under clause 30 of the JSA Bill) by the Jobs and Skills Australia
Act or by any other law of the Commonwealth, or incidental or conducive
to the performance of the above functions. |
| Consult |
Nil. |
‘Where appropriate’, JSA must consult and work with:
state and territory governments
relevant authorities of state and territory governments
employers, unions, training providers and other industry stakeholders,
and other persons or bodies with an interest in the labour market, workforce
skills or workforce training needs.
|
Sources: NSC Act, section 7; JSA Bill, clauses 9 and
10.
The JSA Director and staff
The NSC Repeal Bill proposes to repeal the NSC Act
if the Jobs and Skills Australia Act comes into force. No transitional
arrangements for the NSC are included in the Bills. The NSC, along with the
appointment of the inaugural
National Skills Commissioner, would therefore be dissolved on commencement
of the NSC Repeal Act.
The JSA Bill proposes that the JSA will be headed by a JSA
Director, appointed by the Minister by written instrument for a period of up to
1 year.[31]
The Director’s remuneration is to be determined by the Remuneration Tribunal,
or in the absence of such a determination, prescribed by the rules made by the
Minister (which would be disallowable).[32]
The Minister will have the power to direct the JSA
Director regarding the performance of their role (with such direction not being
a legislative instrument, and thus not open to scrutiny or disallowance by the
Parliament).[33]
However, this cannot relate to the content of advice given by the JSA Director,
which affords JSA a degree of independence.[34]
The JSA Director is to be supported by a staff made up of
Australian Public Service employees of the department (currently the Department
of Employment and Workplace Relations) or other departments.[35]
The JSA Director may also engage consultants to assist with their functions.[36]
Concluding comments
The creation of JSA appears to have two benefits over the
current NSC, which may assist to resolve the current impasse in skills training
reform: it includes consultation as one of the new agency’s responsibilities
under its establishing legislation, and it does not include the VET pricing
focus which appears to have been a barrier to agreement over the replacement
for the NASWD. Further, its broader remit may provide more opportunities to
consider skill needs beyond those occupations served by VET.
However, as some stakeholders have identified, the success
of the JSA model will largely depend on governance arrangements that are not
included in the current Bills. The development of such arrangements, and the
transition from the NSC to JSA will need to be carefully managed. Otherwise, there
is a risk that the creation of JSA will repeat the tendency of past governments
to lose money and corporate memory setting up and abolishing broadly similar bodies.[37]
[1]. Australian
Labor Party, ‘Your
Education’, media release, n.d; Anthony Albanese (Leader of the
Opposition), ‘Jobs
and the Future of Work: Speech to CEDA, Perth’, media release, 29 October 2019.
[2]. Brendan
O'Connor, Second
Reading Speech: Jobs and Skills Australia Bill 2022, House of Representatives,
Debates, (proof), 27 July 2022, 16.
[3]. Organisation
for Economic Cooperation and Development (OECD), The
Post-COVID-19 Rise in Labour Shortages, working paper, 1721 (Paris: OECD,
2022).
[4]. Damian
Oliver (Assistant Secretary for Pricing and Performance, National Skills
Commission), ‘Speech
to the ITEC22 Conference’, 3 June 2022.
[5]. ‘Skills
Priority List’, National Skills Commission (NSC), last updated 8
February 2022.
[6]. ‘Projecting
employment to 2026’, NSC, 29 March 2022.
[7]. NSC,
State of
Australia’s Skills 2021: Now and into the Future,
(Canberra: NSC, 2021).
[8]. OECD,
The
Post-COVID-19 Rise in Labour Shortages, 9.
[9]. NSC,
State of
Australia’s Skills 2021, 52 and 76–78; Productivity
Commission (PC), 5-year
Productivity Inquiry: The Key to Prosperity, interim report, 1, (Canberra:
PC, July 2022), xi and 47–49.
[10]. PC,
5-year
Productivity Inquiry, 47–49.
[11]. Examples
of initiatives include the JobTrainer Fund,
Boosting
Apprenticeship Commencements, and some elements of the Job-ready Graduates Package.
Further detail is available in Hazel Ferguson, ‘Tertiary
Education and COVID-19 Recovery’, Parliamentary Library Briefing Book:
Key issues for the 47th Parliament, (Canberra: Parliamentary Library, June
2022).
[12]. This
history is detailed in Hazel Ferguson, ‘National
Skills Commissioner Bill 2020’, Bills Digest, 100, 2019–20,
(Canberra: Parliamentary Library, 2020).
[13]. S.
Joyce, Strengthening
Skills: Expert Review of Australia's Vocational Education and Training System,
(Canberra: Department of the Prime Minister and Cabinet (PM&C), 2019);
Australian Government, ‘Budget
2019–20’, Budget Measures: Budget Paper No. 2: 2019–20, 69–70;
Hazel Ferguson, ‘Delivering
Skills for Today and Tomorrow: Government's response to the Joyce Review’, FlagPost
(blog), Parliamentary Library, 24 April 2019).
[14]. National Skills
Commissioner Act 2020 (NSC Act), section 7.
[15]. Australian
Government, ‘Budget
2022–23’, Federal Financial Relations: Budget Paper No. 3:
2022–23, 45.
[16]. ‘Skills
and Workforce Development Agreement’, PC, n.d.; PC, National
Agreement for Skills and Workforce Development Review, (Canberra: PC,
2020).
[17]. ‘Heads
of Agreement for Skills Reform’, PM&C, 5 August 2020.
[18]. Ronald
Mizen and Julie Hare, ‘Discussions
Turn Sour on $3.7b National Skills Deal’, Australian Financial Review,
1 April 2022, 6.
[19]. Hazel
Ferguson and Matthew Thomas, ‘Skills
Training’, Budget Review 2022–23, (Canberra: Parliamentary Library, April
2022); Australian Government, ‘Budget
2022–23’, Budget Measures: Budget Paper No. 2: 2022–23, 78–79.
[20]. Senate
Standing Committee for the Selection of Bills, Report,
2, 2022, 28 July 2022.
[21]. Senate
Education and Employment Committees, Inquiry
into the Jobs and Skills Australia Bill 2022 [Provisions] and the Jobs and
Skills Australia (National Skills Commissioner Repeal) Bill 2022 [Provisions].
[22]. Senate
Standing Committee for the Scrutiny of Bills, Index
of bills considered by the committee, 31 March 2022.
[23]. Michaelia
Cash (Minister for Employment, Skills, Small and Family Business), ‘Labor’s
Policy Plagiarism’, media release, 29 October 2019.
[24]. Explanatory
Memorandum, Jobs and Skills Australia Bill 2022 [and] Jobs and Skills
Australia (National Skills Commissioner Repeal) Bill 2022, 3.
[25]. The
Statement of Compatibility with Human Rights can be found at pages 4–8 of the Explanatory
Memorandum to the Bills.
[26]. Parliamentary
Joint Committee on Human Rights, Index
of bills considered by the committee, 25 March 2022.
[27]. Group
of Eight universities, ‘Go8
Supports Solution to National Skills Shortage’, media release, 28 August 2022;
Australian Chamber of Commerce and Industry, ‘Jobs
and Skills Australia Offers Pathway to Overcoming Skills Crisis’, media
release, 27 July 2022.
[28]. Universities
Australia, ‘Jobs
and Skills Australia Critical to Our Future’, media release, 27 July 2022;
Independent Tertiary Education Council Australia, ‘Jobs
and Skills Australia Legislation Introduced into Parliament’, media
release, 27 July 2022; Australian Education Union, ‘AEU
Statement on Jobs and Skills Australia’, media release, 28 July 2022;
and the Business Council of Australia, ‘Skills
will be Critical to Reaching the Frontier’, media release, 27 July 2022.
[29]. Ai
Group, ‘Jobs
and Skills Australia Key to Recalibrating National Skills Strategy’, media
release, 28 July 2022; TAFE Directors Australia, ‘Responding
to Future Skills’, media release, n.d.
[30]. Brendan
O'Connor, Second
Reading Speech: Jobs and Skills Australia Bill 2022, House of
Representatives, Debates, (proof), 27 July 2022, 16.
[31]. JSA
Bill, clauses 12, 13 and 18.
[32]. JSA
Bill, clauses 20 and 30.
[33]. JSA
Bill, clause 27.
[34]. JSA
Bill, clause 27.
[35]. JSA
Bill, clauses 14 and 15.
[36]. JSA
Bill, clause 16.
[37]. John
Ross, ‘New
Australian Workforce Agency to Target Graduate Shortage Areas’, Times
Higher Education, 28 July 2022.
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